Cake, the digital bank launched in early January 2021, has surpassed the 3 million user mark in Vietnam in just two years. By the end of 2022, Cake will have processed more than $1.65 billion in transactions and payments, as well as mobilised nearly $87 million through deposit savings products.

Thanks to its technological advantages, Cake has been well-recognised for its solid and stable experience, simple operation, quick processing, and outstanding features and services. On the Cake app, opening a bank account or a digital bank credit card doesn't take more than two minutes, and the majority of transactions are completed swiftly.

Nguyen Huu Quang, CEO of Cake by VPBank, said that Cake platform is empowered by advanced technology capabilities to simplify processes and achieve banking automation.

Usually, a traditional retail bank would need several years of expertise and a workforce of 1,000–3,000 people to serve 2.5 million customers. But there are just 150 employees at Cake, and 60 per cent are in technical positions.

“Cake positioned as a technology company that provides banking and financial services based on core strength in technology. Cake owns excellent technological capabilities, including big data processing and automation, which is one of the major reasons why so many clients embrace and trust the product,” Quang said.

Previously, the company successfully collaborated with Mambu to complete the core banking replacement project in just 74 days, setting a new record in the field.

In 2022, the EuroMoney Market Leaders accreditation programme rewarded Cake as Vietnam's best bank for digital solutions 2022.

A new era

As a result of the widespread adoption of digital transformation in all industries, Vietnamese citizens are currently becoming more accustomed to cashless payment methods. However, digital banking is relatively new.

In comparison with digital banks, e-wallets are still focusing on developing the retail payment stage. As for other financial services, it is necessary to link up with licensed banks and financial institutions. While traditional bank apps still primarily offer their basic financial services, for more advanced services, users must visit a bank.

As for digital banks, a seamless, completely automated online financial service experience is prioritised. Therefore, digital banks represent a distinct, varied, and more independent segment in terms of operations, and the challenges are undeniable.

The first challenge is to keep consumers' money safe, which requires both asset and legal protection. On the other hand, because digital banking has no physical branches, it must ensure non-stop online operation.

As a result, the difficulties just engage the technological factor. With its big data analytic capability, digital financial products must be ‘tailored-made’ to each target consumer in order to understand their needs, behaviors, habits, and preferences. Technology also helps the platform to effectively manage corporate operation and control risk, a mandatory requirement in the financial sector.

“We believe that Cake can only be considered a true digital bank if it can provide distinctive digital financial products and services. Products must be optimally created for each intended client segment. Other than that, it is just the digitisation of banking services,” Quang said.

In fact, Cake is gradually increasing its competitiveness through big data mining, focusing on attracting young people between the ages from 18 and 40, who often use mobile devices for work, entertainment, and daily shopping. Cake can also recognise and approve credit card limit increases for users in a fully automated manner.

On-demand Multi-service Consumer Platform Be is one similar example of how Cake can use its technological prowess to develop bespoke digital financial solutions for each partner.

According to a Google Temasek study on the digital economy in Southeast Asia, with strong lending at 56 per cent and digital investments likely to leapfrog after 2025, digital financial services have ample space to expand. With financial services like payment and money transfer, as well as the upcoming addition of insurance, lending, and investment products, there are multiple opportunities.